Correlation Between Granite Point and Brookfield DTLA

Can any of the company-specific risk be diversified away by investing in both Granite Point and Brookfield DTLA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Granite Point and Brookfield DTLA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Granite Point Mortgage and Brookfield DTLA, you can compare the effects of market volatilities on Granite Point and Brookfield DTLA and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Granite Point with a short position of Brookfield DTLA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Point and Brookfield DTLA.

Diversification Opportunities for Granite Point and Brookfield DTLA

0.0

Correlation Coefficient

Granite Point  Brookfield DTLA

Pay attention - limited upside

The 3 months correlation between Granite and Brookfield is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Granite Point Mortgage and Brookfield DTLA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brookfield DTLA and Granite Point is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Granite Point Mortgage are associated (or correlated) with Brookfield DTLA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brookfield DTLA has no effect on the direction of Granite Point i.e., Granite Point and Brookfield DTLA go up and down completely randomly.

Pair Corralation between Granite Point and Brookfield DTLA

If you would invest  1,769  in Granite Point Mortgage on November 29, 2024 and sell it today you would earn a total of  2.00  from holding Granite Point Mortgage or generate 0.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Granite Point Mortgage  vs.  Brookfield DTLA

Granite Point Mortgage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Granite Point Mortgage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Granite Point is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Brookfield DTLA

Risk-Adjusted Performance

Very Weak

Over the last 90 days Brookfield DTLA has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Brookfield DTLA is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Granite Point and Brookfield DTLA

The main advantage of trading using opposite Granite Point and Brookfield DTLA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Point position performs unexpectedly, Brookfield DTLA can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Brookfield DTLA will offset losses from the drop in Brookfield DTLA's long position.

The idea behind Granite Point Mortgage and Brookfield DTLA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.